New technologies, business models and capital markets: how alternative lending developed in 2017
Already at the beginning of the last year, our project — the SHIFT.cash platform, which deals with loans secured by car titles, is going for the ICO. In order for the project to be successful, our analysts keep their hands on the pulse and take into account all the current trends in our industry. And this is how the year 2017 was for the alternative lending market.
The main drivers for the development of projects in the sphere of alternative lending are innovative technologies. Alternative platforms initially could impose competition on banks due to a more flexible and convenient service. The introduction of new technologies into their processes will only strengthen the positions of alternative lending platforms. Especially since banks are also not being idle, since they are backed by large investments and opportunites.
The main vectors of improvements are user-friendliness and security. Artificial intelligence is used for quick responses to client requests. The quality of credit assessment systems is also improved. This is accomplished by, among others, the implementation of Big Data technology. And the information is processed in a variety of formats, ranging from the behavior of the potential borrower in social networks and the Internet along with the psychological evaluation of the questionnaire he filled out. In addition, in 2017, many projects announced that they are transferring their sites to a blockchain, that is, they minimize the possibility of fraud on their platforms, thereby increasing the attractiveness for investors.
The second trend, which can be noted, is the continued segmentation of the industry. In classical directions, for example, in the P2P sphere, leaders have already been outlined for a long time, it will be difficult for new players to catch up by using the same or similar business models. In turn, successful platforms are those that have a more broad target audience and at the same time some specific specialization. For example, in 2017, very popular were loans for students or people without a credit history. An increasing share of the market began to win over platforms that specialize in secured lending. Modern technologies have allowed to automate the process of assessing the collateral and withdrew the most low-risk segment of lending online.
For example, our platform SHIFT.cash deals with loans secured by car titles. Thanks to the built-in system of working with large data (Big Data) and asset tokenization (transfer of the value of the collateral to the internal cryptocurrency of the platform) we were able to fully automate the process of secured lending for a wide audience — car owners. Using blockchain technology and smart contracts in the project allows for transnational transactions, that is, opens up opportunities for the use of the platform by borrowers and investors around the world.
Another trend in the sphere of alternative lending in 2017, which will be strengthened in 2018, is entering new capital markets. There are several possibilities for this. One of them is attraction of institutional players to the platforms as investors, and even banking structures. Another format is the aggregation of disparate assets on a single platform. This strategy is also used by our platform. At present, the car loan market is represented by small and medium-sized companies all over the world. They have difficulty accessing cheap bank money, which forces them to attract more expensive private funds. With the help of the SHIFT.cash platform, the disparate small players will be able to become partners for a global system that will provide direct access to large finances consisting of investments made by thousands of investors around the world. By connecting to the SHIFT.cash system, various partners will earn much more, by increasing the amount of activity and access to global finance.
